New Resource Estimate
It seems quite evident that the resource count will be much upward of the 2.0M Oz as being suggested lately. The question remains how will the "Nugget Effect" influence the resource and what level of accuracy will they announce. The 12,000m drill with some 48 holes is certain not to produce anything significant in the measured and indicated categories but the inferred resource will be significant.
The following still remains as facts:
The new resource is at least 4 times that previously announced. ie we now have a strike length of 1000m as opposed to 250m and a continuity for at least 2500m which drilling of future sections D and E will reveal. In addition, the resource is open in all directions so we've just begun to define the Ore deposit size.
This resource estimate will now take the "Nugget Effect" into consideration as opposed to previous estimates. This concept is nothing new in the Mining field and an experienced geologist should be able to deal with this easily.
Previous bulk sample by Placer Dome confirmed that there was a much higher gold concentration than the drill results revealed. From a 4000 tonne sample, they found 5-6 grams per tonne. If you consider Orex exploration current resource of 800k Oz Au over a 100m x 250m x 200m deposit at 2.7T/m3, we get a 1.77g/T deposit. In my oppinion the "Nugget Effect" wasn't fully implemented in the original resource estimate.
The new deposit that will be reported is 4 times larger with the "Nugget Effect" being taken into consideration which contains at least twice as much gold as previous estimates used ( ie 1.77g/t vs 5-6 g/t).
What will this new resource reveal? In my view, 2 possible outcomes:
A huge new resource that was severely underestimated in the past, a very likely scenario.
A new modest resource (possibly 2.0M Oz Au) with a clear objective from the company as to define the resource into a measured and indicated resource, obtain new finance at a higher price and test the new areas eventually.
There we have it, either way, we're looking at a long term project here with sound fundamentals that require a professionnal management in order to deliver an eventual gold mine or partner with a major.